Question

Consider community safety or defense, meaning freedom from crime and threats, to answer the following questions. [LO 19.2] a. What sort of good is community safety? b. If you lived in a place with no governmentfunded police force, would you expect community safety to be oversupplied or undersupplied? c. Suppose that some neighbors get together and organize a block watch group. What term do economists use to describe someone who lives in the neighborhood but chooses not to volunteer as part of the block watch?

Short answer

a. A public good. b. Undersupplied. c. Free-rider.

Step-by-step solution

- Identify the Type of Good

Community safety, especially from crime and threats, is considered a public good. Public goods are non-excludable and non-rivalrous; this means you cannot prevent people who do not pay for the good from using it, and one person's use of the good does not reduce its availability to others. Thus, community safety fits this description as it benefits all individuals in the community, regardless of their contribution.

- Analyze Supply Without Government Intervention

In places without a government-funded police force, community safety would likely be undersupplied. Public goods, like community safety, often suffer from the free-rider problem, where individuals have little incentive to pay for the good themselves if they can benefit from others' contributions. This typically results in less of the good being provided than is socially optimal.

- Define Free-Rider Problem

In the context of neighbors forming a block watch group, an individual who benefits from the increased safety brought about by the group but does not contribute or volunteer is known as a 'free-rider.' Economists define a free-rider as someone who obtains benefit from public goods without contributing to their provision.

Key concepts

Free-Rider Problem

The free-rider problem occurs when people receive the benefit of a good without having to pay for it. Imagine a group of neighbors forming a block watch to ensure the safety of their street. Some individuals might decide not to participate or contribute to the watch. Yet, they still enjoy the peace and security it provides. This behavior is an example of the free-rider problem.
The free-rider issue is common with public goods. These goods can be accessed by everyone, whether they contribute to their cost or not. This can lead to the good being under-provided since not enough people voluntarily pay for it. In this case, there might be fewer people willing to join the block watch or fund its activities.
To overcome the free-rider problem, communities often rely on taxation or mandatory fees, ensuring everyone contributes fairly to public goods. This approach helps to supply these goods appropriately.

Non-Excludable

A non-excludable good is something that is available for everyone to use. Once it is provided, it's challenging to prevent people from using it, even if they haven't paid for it.
Consider community safety as an example. When a neighborhood block watch keeps an area safe, every resident enjoys the reduced crime. No one in the community can be excluded from this benefit, making it non-excludable.
Non-excludability often causes funding issues, similar to the free-rider problem. It becomes difficult to encourage everyone to contribute financially since they know they will receive the benefit regardless of whether they pay. This characteristic necessitates unique funding strategies, such as government programs, to ensure adequate provision of non-excludable goods.

Non-Rivalrous

Non-rivalrous goods can be consumed by one person without making them less available to another. Think about a bright streetlight illuminating a street. One person using the light doesn't prevent others from using it too.
Community safety shares this trait. When a community becomes safer due to policing or a watch group, everyone in the area enjoys this safety simultaneously. A safer environment for one resident does not reduce the safety for another.
This aspect of non-rivalrous goods means they do not experience depletion from use. But coupled with non-excludability, it leads to problems like the free-rider issue, where people benefit without contributing. Understanding these characteristics can help devise better policies to manage public goods efficiently.

Community Safety

Community safety is crucial as it ensures a peaceful and secure environment for all its residents. It is considered a public good because of its non-excludable and non-rivalrous nature.
For instance, in a neighborhood with robust safety measures, everyone benefits from the decrease in crime even if they did not contribute to the safety infrastructure. This makes community safety a shared responsibility.
Without sufficient support, community safety might suffer. If a government-funded police force isn't available, communities might face undersupply issues. This is often due to the free-rider problem, where many rely on others to enhance safety. Hence, strategic approaches and community participation become vital to maintaining and enhancing safety.
Addressing community safety requires collective efforts and sometimes, intervention through taxes or local initiatives can maintain necessary safety levels for all.